'​West may end up isolated if Russia turns East'

Russia's President Vladimir Putin (L) and China's President Xi Jinping shake hands after signing an agreement during a bilateral meeting at the Xijiao State Guesthouse ahead of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit, in Shanghai May 20, 2014.(Reuters / Carlos Barria) / Reuters

Russia is about to hitch its wagon to the fastest growing economy and largest market in the world, Business New Europe editor Ben Aris told RT, adding that the West will ultimately be playing catch-up after its efforts to isolate Russia with sanctions.

RT:So, Ben, these stronger ties between
Moscow, many expect them obviously to be beneficial for both
sides. But where does that leave Russia’s significant trade
partner, the EU?

Ben Aris: Well, it’s going to be part of
Russia’s turn towards the East, reorientation if you like, as a
function of the worsening relationships with Western Europe. I
think to begin with, it won’t make that much difference in so
much as Russia is a commodity provider, oil and gas being the
main commodities, and Russia is tied to Europe through its gas
pipelines, so that will continue.

What we’re talking about is where Russia’s going to go in the
future and I think all of the intention, all of the energy is
going to be thrown into building up Russia’s trade and energy
exports to the East and those that existed in the West are going
to sort of remain and not develop any further.

This could play against Europe in the long run; if all the growth
is coming out of Asia and China and the BRICS countries, then it
could be that the EU sort of gets left behind while Russia enjoys
the ride on the wave of those growing economies.

RT:Putting economics aside, what about
politically? What could this partnership do in terms of
international affairs?

BA: I think we’re seeing - or about to see,
assuming that these deals go well tomorrow - a massive change in
the set-up, the balance, the geopolitical balance. In so much as
the West has been confronting Russia over the Ukraine problem.
But Putin said from the beginning that his goal in foreign policy
is to create a multipolar world. Now he’s been kind of on his own
doing that, as opposed to the unipolar world which is dominated
by America. But Russia and China have never been natural friends.
However, China has come out very strongly in support of Russia as
they’ve showed down with the States.

And I think that’s because Chia is as worried about this unipolar
set up as Russia is. So the irony is this whole fracas has been
to push Russia and China together and to get them to get over
their natural mistrust of each other and to become deep and
strategic partners. So this is a new political alliance we’re
seeing, a new political configuration. It’s got enormous
consequences going forward.

RT:Should Washington be concerned by all of
this?

BA: Well, the irony of these sanctions is that
they’ve been attempting to isolate Russia and make it a pariah.
But one of the upshots of this, if this new relationship does
work out, is that it could end up being the West that’s isolated,
insomuch as they get to miss out on this sort of boom that’s
going on in the emerging world. It’s been widely reported that
China is about to overtake the states in terms of the size of its
economy, and Russia’s about to hitch its wagon to the fastest
growing and largest market in the world. So strategically you’ve
got to wonder, what’s that going to mean for the West, who are
going to end up playing catch-up?

RT:But surely Russia isn’t the only country
- we’ve seen the likes of the UK, of course, doing massive trade
deals with China. Do you think there would in effect be a race to
do business with China - and Russia clearly isn’t the only
country that’s going to be taking part in this?

BA: No indeed. But Russia and China have been
described as the best synergy on the planet. China has the
people, the massive consumer market, it’s got the cash. Whereas
Russia has all the raw materials and that’s what China is
missing. That’s what Russia offers China, and China doesn’t
function without those inputs to its factories. What the Western
countries are offering are high technology and finished goods.
But Russia has the raw materials to make the Chinese economy
work, without which it won’t be able to function and compete.

RT:So there have been concerns about
China’s economy, haven’t there? Do you think perhaps countries
could become too resilient on China at this stage?

BA: Well, its big, and I think the problem is,
is that it remains an emerging market; it’s not a democracy, it’s
not a free market in the sense that we have in Europe, and the
history has been that emerging markets have crises and China
hasn’t had one yet. So I think at some point, China is going to
have a crisis. And when it does, the whole world is going to be
affected. It’s going to be very nasty. Worryingly, the banks are
overextended; worryingly, the property market has started to turn
down in China. And they’ve got to manage this. Happily, they have
this enormous cash cushion, so hopefully they can always engineer
a soft landing. But it’s certainly going forward. This is going
to be an increasing concern to everyone - how do you insulate
yourself from China if it does crash and everyone’s rushing to
expose themselves as much as they can at this point?

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.